What About Learning?

If costs rise as quantities increase in mining and refining, creating what classic economists call upward-sloping curves (see the last post), how do costs behave in other industries?

Let’s look.

Solar manufacturing costs have consistently fallen over time. This phenomenon, known as Swanson’s Law, observes that “at present rates, costs go down 75% about every ten years (https://lnkd.in/gYHnMDz The consistent drop in costs reflects the learning or experience curve, which observes the amount of time people take to complete tasks falls over time. In other words, people get smarter about how to get tasks done; the more often they do those tasks. The learning curve is one of the great omissions in modern economics. Where else can we find such curves?

#prices #supply #learning #learningcurve